Clearing Synchronization Rights For Music Uses on the InternetEntertainment Law & Finance, January 2001By Steve Gordon

In the past several years, more and more audiovisual works have
started
to appear on the Internet, ranging from music videos to full-scale
concerts.
Therefore, it is important to understand not only the necessity of
obtaining
a "synchronization" license to use the underlying music, but also
the range
of rights that should be obtained and how much those rights should
cost.

A synchronization license authorizes the user to synchronize music
with
an audiovisual work. This permission actually consists of two
separate elements:
the permission to reproduce the music in connection with a
particular audiovisual
work (e.g., a movie or an audiovisual recording of a concert),
coupled with
certain conditions limiting how the audiovisual work may be used.
Such conditions
may restrict the medium in which the audiovisual work may be used
(such
as only on cable TV or only on the Internet), the territory and
the duration
of the license.There is no law or statute governing the amount of
money
that must be paid for a synchronization license. This is unlike a
mechanical"
license. A mechanical license permits the reproduction of music in
a form
that may be heard with the aid of a "mechanical" device, without
visual
images. An example of a mechanical use of music is a standard
audio-only
CD. If the song has been recorded before, the mechanical license
is subject
to a compulsory license fee set by federal statute. Each "synch"
license,
in contrast, must be negotiated individually.

Music VideosOne of the most popular uses of audiovisual content involving
music
on the Web is for music videos. For music videos, there is an
industry wide
practice of granting a free license for television. Sometimes, a
token charge
of less than $200 is exacted. Music publishers (which represent
most songwriters,
for the purpose of licensing) perceive music videos as promoting
record
sales from which they reap mechanical royalties. Therefore, they
do not
charge much, if anything, for this kind of synch license. But many
publishers
will limit the medium in which a music video may be shown to
television.
Some specifically prohibit the use of the music video on the
Internet. Certain
publishers perceive the Web as a possible way for the song to be
copied.
This problem may be overcome by discussing the precautions against
downloading
that the licensee will take.

A record company may be in a stronger position than most providers
of audiovisual
works, because of the so-called "controlled composition" clause
contained
in many recording contracts This provision generally provides, in
relevant
part, that with respect to songs that the artist wrote or
co-wrote, the
artist grants a free synch license to the record company to use
the song
in any audiovisual work that the record company produces or
controls. Most
music videos are produced by the labels on a work-for-hire basis.
That is,
the labels own and control the videos. Many music videos feature
songs that
were written or co-written by the artist. Therefore, a record
company often
obtains a free synch license in many of the music videos it
produces.

Furthermore, the controlled composition clause generally allows
the label
to exploit the music video in any medium, including the Internet.
Consequently,
record companies will often have the right to play music videos on
the Internet
without having to ask permission for a synch license or pay any
fee. It
is also important to note another advantage a record company has
in using
a music video in any media including the Internet. Most music
videos are
actually silent movies synchronized to prerecorded tracks. The
record companies
usually produce and own these recordings or masters. An
independent producer
who makes a silent movie and synchronizes it to a prerecorded
track would
not only need a synch license from the songwriter to use the
underlying
musical composition, but would also need a "master use" license
from the
record company to use the prerecorded musical track.

Recorded Audiovisual ConcertsAnother fast-growing area of music on the Web is the
transmission of
live or prerecorded con-certs. An audiovisual recorded concert is
generally
viewed differently than a music video by the songwriting
community. A music
video sometimes referred to as a "promo video," is generally seen
as promoting
the album in which the song is incorporated. Increased album sales
will
result in additional mechanical royalties to the songwriters, and
the music
publishers that represent them. Music videos are also gener-ally
provided
to television outlets at no charge in the hopes that the
television exposure
will spur album sales. In contrast, producers of audiovisual
concerts will
generally seek to charge TV outlets for airing a con-cert.
Although these
fees may only reimburse the producers for the cost of recording
the concert,
a fee is generally exacted because the songwriting community
generally perceives
the concerts as commer-cial ventures rather than purely
promotional. For
this reason, producers or owners of audiovisual recorded concerts
should
expect to pay for a synch license. An excep-tion is a live
concert. Copyright
law exempts live concerts from the requirement to obtain a synch
license.
However, if-and this is usually the case-the audiovisual recording
of the
concert is repeat-ed, a synch license will be required.

If the artist featured in the concert is young and relatively
unknown, the
producer may be able to convince the songwriter, or his or her
music publisher,
that the concert is promotional. The argu-ment is that the concert
will
make very little or no money for the pro-ducer, but will promote
the artist
and his or her songs, resulting in future mechanical royalties
from album
sales for the songwriter and the publisher. If the artist is
established,
or a star such as Michael Jackson, it will be far more difficult
to obtain
a free synch license. In that case, the producer shall have to
negotiate
with the publisher. The permission to use the song and the fee
will both
depend on the nature of the rights requested.

For the Internet, those charges range depending on the manner and
duration
of use sought. First of all, publishers will generally prohibit
downloading,
to prevent decreased record sales from which they receive
mechanical royalties.
A concert producer must also decide whether to ask for
video-on-demand or
a set number of prescheduled performances. Video-on-demand allows
users
to see the concert any time they want. Or the producer may ask for
permission
to transmit a limited number of prescheduled performances similar
to the
way per-per-view presently works on cable systems throughout the
country.
The producer must understand that certain publishers will not
authorize
a license, no matter what the price, for video-on-demand.
Therefore, only
the latter alternative may be available. Many music publishers
charge a
fee com-parable to basic cable licenses. These charges are
generally lower
than network TV licenses, because the number of concert viewers on
the Internet
is anticipated to be far fewer than for a network perfor-mance. An
average
cost of a cable license is $500 to $1500 in the United States
alone, depending
on a number of factors that include the duration of the license,
the number
of plays requested and the popularity of the song and the artist.
Still,
the producer may pay more for the Internet use, because
transmission on
the Web may be seen by viewers all over the world.

Again, record companies may be in a stronger position than most
concert
producers because of the controlled composition clause. As stated
earlier,
with respect to songs that the artist wrote or co-wrote, the
artist grants
the record compa-ny a free synch license to use the song in any
audiovisual
work that the record company produces. Thus, if the label produced
the concert,
it may be entitled to a free license, at least in songs that the
artist
wrote or co-wrote.

Generally, these clauses are written very broadly and cover
transmission
on the Web, even if they were written before the advent of the
popularity
or even the existence of the Internet. Of course, the artist can
ask for
a modification of this clause before agreeing to perform in, and
allowing
the recording of, the concert. We have already discussed the
record companies'
rights in prerecorded masters for use in music videos. But record
companies
also have other rights that come into play in the recording of
concert programs.
Many recording contracts prohibit an artist from recording two or
more audiovisual
renditions of songs for any purpose, without consent. Thus, if an
ndependent
producer records a concert without the label's permission, the
producer
may run afoul of the artist's contract with the record company,
subjecting
the producer to a claim of "interference with contract." However, a
record
company often wants to support an audiovisual recording of a
concert in
return for particular rights. Support could come in the form of
providing
for the artist's travel and accommoda-tions, rehearsal fees, and
the like.
The record company may even contribute to production costs in
return for
certain rights, such as home video.

Who would control the Internet rights would be subject to
negotiation. Of
course, these considerations would not come into play with
unsigned artists.

Performing Rights SocietiesEven with a synch license, the producer is not totally in the
clear.
He or she should make the Internet service responsible for
so-called public
performance licenses and fees. A public performance license is the
right
to play music publicly. A performance on the Internet is
considered a public
performance and requires a public performance license. The
performing rights
societies control the performing rights for the great majority of
songs.
In the United States, the three major performing rights societies
are ASCAP,
BMI and SESAC. The producer should get the Internet service
transmitting
the video or concert to warrant and represent that it has secured
licenses
from the performance rights societies, or at least assume all
responsibility
for their payment, including reasonable attorney fees in case of
litigation.